Books: Dark Money, Foundation, and the Ministry of Fear

Dark Money, by Jane Mayer

I’m no physicist, but my rough understanding is that dark matter is something that has not been directly observed, but which is believed to exert an influence on the things we can observe, and without this hypothesised dark matter, the model doesn’t quite fit.

It’s an apt metaphor for the role of political donations in the political system – not deeply discussed, difficult to observe in detail, but likely to have an impact (if not a significant one).

It seems that a critical moment for Mayer in her research on political donations was writing a profile of David and Charles Koch (they have two other brothers, but when people say ‘the Koch brothers’, they’re typically referring to David and Charles). After an attempted smear campaign against her, Mayer has published an in-depth book on political donations in American politics – and in particular, conservative political donations.

The book is mostly told through the lens of individuals. In particular, Charles and David. She chronicles their childhoods, their growth and subsequent careers as political donors. She touches on some of the other key donors, in particular networks. She also looks at individuals whose lives have been impacted – there are devastating stories of people who have suffered tremendously, employees who didn’t receive compensation, small people on the losing end of the power of the Koch brothers’ companies.

Through tracing these individual stories, Mayer tells the story of how political donations have come to exert a huge influence on the American political system. As a review in the New York Times notes:

The brothers had spent or raised hundreds of millions of dollars to create majorities in their image. They had succeeded. And not merely at the polls: They had helped to finance and organize an interlocking network of think tanks, academic programs and news media outlets that far exceeded anything the liberal opposition could put together.

It is this conservative ascendancy that Jane Mayer chronicles in “Dark Money.” The book is written in straightforward and largely unemotional prose, but it reads as if conceived in quiet anger. Mayer believes that the Koch brothers and a small number of allied plutocrats have essentially hijacked American democracy, using their money not just to compete with their political adversaries, but to drown them out.

It’s an excellent book, based on what must have been years of in-depth research. I’d highly recommend it, as one of the more detailed accounts of how capital can be used to influence academic and media systems, which in turn can influence democratic votes.

The only area where I thought the book might have been improved, was if it had provided a little more big-picture context. Particularly in historical and political economic terms. Historically, it would be fascinating to know how the influence exerted by some of today’s wealthiest donors compares to the wealth and influence of key actors during the gilded age. In turn, that leads to interesting questions of political economy – is this political use of wealth unprecedented? How has it interacted with other parts of the political system previously?

This is an interesting area, that I’ve seen some fascinating work on (research that suggests elite preferences have much more impact on outcomes, and other research suggesting that people may not vote in their own self interest). It would have been interesting to see at least some links there, from Mayer’s in-depth and valuable research, to a broader conceptual framework.

But it’s worth quoting here a statement (not by Mayer) that Mayer thought was worth including in her book:

The system is controlled by a handful of ultra-wealthy people, most of whom got rich from the system and who will get rich from the system.

Mayer is very careful throughout to allow that the donors may genuinely believe in all the ideas that they’re financing, regardless of what they stand to gain. But it’s important to note, as she does, that:

… it was impossible not to notice that the political policies they embraced benefited their own bottom lines first and foremost.

It’s also interesting with these types of books (written by journalists about very wealthy individuals – for example Virtual MurdochMurdoch’s Pirates and McKnight’s Rupert Murdoch). For example, Mayer carefully words this quote with a qualifier:

” … a lot of people got sick, and there were more birth defects in Saltville than in other parts of the state,” she asserts, although there has been no study proving this or establishing any causal correlation.

But for all those minor flaws, this is an excellent read. Well worth it.

UPDATE: Just a quick note, that given the context that Mayer’s book provides, this article at Vox by Andrew Prokop is an interesting read: The GOP can’t quit Obamacare because of their donors. It’s an interesting read.

Quotes

In his telling, he was almost feverishly bent on finding some overarching system of political theory to bridge his father’s emotional anti-Communism with his own more analytical approach to the world. He also wanted to merge his thinking about business and his interests in engineering and mathematics. “I spent the next two years almost like a hermit, surrounded by books,” he told the Wall Street Journal in 1997. Visitors to his apartment recall him littering almost every surface with abstruse economic and political texts. He later explained that having learned that “there are certain laws that govern the natural world,” he was trying to discover “if the same isn’t true for the societal world.” …

The conservative publication omitted Hayek’s politically inconvenient support for a minimum standard of living for the poor, environmental and workplace safety regulations, and price controls to prevent monopolies from taking undue profits …

In order to alter the direction of America, they realized they would have to “influence the areas where policy ideas percolate from: academia and think tanks.” …

A consequence [of charitable trusts], however, was that the tax code turned many extraordinarily wealth families, intent upon preserving their fortunes, into major forces in America’s civic sector …

Called “The Structure of Social Change,” it approached the manufacture of political change like any other product. As Fink later described it in a talk, it laid outa  three-phase takeover of American politics. The first phase required an “investment” in intellectuals whose ideas would serve as the “raw products.” The second required an investment in think tanks that would turn the ideas into marketable policies. And the third phase required the subsidization of “citizens” groups that would, along with “special interests,” pressure elected officials to implement the policies. It was in essence a libertarian production line, waiting only to be bought, assembled, and switched on …

And if there was one test of its members’ concentrated financial power over the machinery of American democracy, it was this minority’s ability to stave off government action on climate change as science and the rest of the world were moving in the opposite direction … For most of the world’s population the costs of inaction on climate change were far greater than those of action. But for the fossil fuel industry, as Mann put it, “it’s like the switch from whale oil in the nineteenth century. They’re fighting to maintain the status quo, no matter how dumb.” …

But an effort by the congressman’s staff to reach the angry constituents revealed that the letters were forgeries, sent on behalf of a coal industry trade group by Bonner and Associates, a Washington-based public relations firm …

A political minority, responding to the interests of its extreme sponsors, had succeeded in rendering the most powerful democracy in the world dysfunctional …

It was one more indication that an invisible wealth primary was shaping the discourse and the field long before the rest of the country had the chance to vote …

 

Mayer also examines the progressive side of politics, noting both the presence of political donors, but she is also willing to draw contrasts, rather than falling into false equivalence bias. One progressive operative recounts:

“I remember meeting at a restaurant in California with some of the major Democratic operatives and funders, Margery Tabankin, Stanley Sheinbaum and Gary David Goldberg. I was telling them that they needed to figure out a way to fund books on the left. But books aren’t sexy. They weren’t interested. They didn’t think that in the political culture it mattered. The Democrats were hostage to star personalities and electoral politics.” …

That year, the Clintons were in the headlines for campaign-finance scandals ranging from virtually renting the Lincoln Bedroom to big donors to taking contributions from a dubious Democratic bundler who later pleaded guilty to raising some of the money from China.

Foundation, by Isaac Asimov

It’s been so many years since I read some of the Foundation series that I can’t remember which ones I read, or whether I’d read the original novel.

Foundation tells the story of a collapsing empire, and psychologist (Hari Seldon), able to predict its collapse through the laws of psychology. In an attempt to shorten the period of disarray that will ensure (from thirty-thousand to just a thousand years), he sets in motion his own plans.

The approach felt in some ways reminiscent to Cixin Li’s Three Body Problem. In each, the driving force isn’t really the characters or their motivations, but the unfolding of a set of fascinating science fiction questions.

In Asimov’s, this is handled by having the story tell three separate points in time, each a stage where Hari Seldon’s carefully planned society must defeat external or internal threats to survive. Asimov’s writing and handling felt better than Li’s – more depth, and a little more believability to the characters. Well worth a read, if you enjoy sci-fi.

The Ministry of Fear, by Graham Greene

The Ministry of Fear tells the story of Arthur Rowe, a man with a deep sense of pity – so intense that he struggles with others’ suffering. When we first encounter Arthur he is visiting a church fete, a welcome relief from the gloom of London during the Blitz. It’s there that he accidentally receives the cake that sets of a series of surreal and bizarre chases.

The style is so surrealist that at points I wondered if Greene had decided to forgo a coherent plot as part of a broader theme, but the different pieces are explained in a coherent way in the last third of the novel. I won’t say more here [SPOILER ALERT – you can read more on the plot below]. 

What makes the novel excellent is Greene’s beautiful writing, which can make even a lazy Sunday church fete feel poignant, or transform a set of bombed out Blitz ruins into something far more significant.

Throughout, he has a very surreal atmosphere, which only recedes in the last third of the novel. He also toys with the question of pity and cruelty – what does pity drive us to do, and what does it mean for our humanity? It’s well worth a read if you enjoy Greene, although it’s not quite as good as his best stuff.

[SPOILER ALERT FROM HERE]

The plot that emerges clearly in the last third of the novel is that Rowe has stumbled onto a German intelligence attempt to get classified information out of the UK. In searching for more information, he goes through a bizarre sequence of events including being framed for a murder at a seance, surviving two bomb blasts (one dropped, the other planted), trying to cash a cheque from a widower during the funeral, and ending up in an asylum after losing his memory.

Throughout, we learn that Rowe’s sense of pity is so intense that he murdered his wife, who suffered from a painful, incurable disease. This hangs over Rowe, and Greene returns to it throughout the novel.

In the final scenes, Rowe is told that he is a murder, bringing that weight back into his life after the amnesia had lifted it from him. His parter-to-be is desperate that he not know, and so he sets out to deceive her for a lifetime; while she will carry the secret that she thinks he has forgotten.

Quotes

That attempt failed. A bomb that hit your house destroyed the cake and everything – and probably saved your life. But they didn’t like the way you followed the case up. They tried to frighten you into hiding – but for some reason that was not enough. Of course they meant to blow you to pieces, but when they found out you’d lost your memory, that was good enough …

He was bewildered: he didn’t know what to do. He was learning the lesson most people learn very young, that things never work out in the expected way. This wasn’t an exciting adventure, and he wasn’t a hero, and it was even possible that this was not a tragedy …

It was a Ministry as large as life to which all who loved belonged. If one loved one feared … He was pledging both of them to a lifetime of lies, but only he knew that … They sat for a long while without moving and without speaking; they were on the edge of their ordeal, like two explorers who see at last from the summit of the range the enormous dangerous plain. They had to tread carefully for a lifetime, never speak without thinking twice; they must watch each other like enemies because they loved each other so much. They would never know what it was not to be afraid of being found out.

Advertisements

Mancur Olson’s ‘The Rise and Decline of Nations’

I’d been meaning to get to The Rise and Decline of Nations for a long time; particularly after I read a meta-review that concluded that the central thesis had held up reasonably well in subsequent academic research. It’s slow going at points, but it was well worth the wait, and the read.

Olson’s central argument is that small groups can organise in such a way as to benefit themselves, but imposing costs on those around them, leaving society as a whole worse off.

As part of his argument, he sets out the mathematical argument underpinning his thinking that smaller groups will have stronger incentives to organise.

The cost (C) of a collective good is a function of the level (T) at which it is provided, i.e. C=f(T). The value of the good to the group, Vg, depends not only on T but also on on the “size” Sg, of the group, which in turn depends on the number in the group and the value they place on the good; Vg=TSg. The value to an individual i of the good is Vi and the “fraction” Fi of the group value that this individual enjoys is Vi/Vg, and this must also equal FiSgT. The net advantage, Ai, that individual i obtains from purchasing an amount of the collective good is given by its value to him minus the cost, i.e., Ai = Vi-C, which changes with the level of T his expenditure obtains, so

dAi/dT = dVi/dT -dC/dT

At a maximum dAi/dT = 0. Because Vi=FiSgT and Fi and Sg are constants

d(FiSgT)/dT – dC/dT = 0

This gives the amount of the collective good that a unilateral maximizer would buy. This point can be given a common-sense meaning. Since the optimum is found when

dA/dT = dVi/dT – dC/dT = 0

and since dVi/dT = Fi(dVg/dT)

Fi(dVg/dT) – dC/dT = 0
Fi(dVg/dT) = dC/dT

Thus the optimal amount of the collective good for an individual to obtain occurs when the rate of gain to the group (dVg/dT) exceeds the rate of increase in cost (dC/dT) by the same multiple by which the group gain exceeds the gain to the individual (dFt = Vg/Vi). In other words, the smaller Ft is, the less the individual will take, and (other things being equal) Fi must of course diminish as entry makes the group larger.

It’s worth noting that the assumption that the cost of a collective good is a function of the level at which it’s provided could be criticised – I imagine it would be possible to find examples where that wasn’t the case. You could also criticise the assumptions about constant Fi, and a few other points.

More broadly, Olson sets out the logical implications, or predictions, that follow from his argument.

1. There will be no countries that attain symmetrical organization of all groups with a common interest and thereby attain optimal outcomes through comprehensive bargaining.
2. Stable societies with unchanged boundaries tend to accumulate more collusions and organizations for collective action over time.
3. Members of “small” groups have disproportionate organizational power for collective action, and this disproportion diminishes but does not disappear over time in stable societies.
4. On balance, special-interest organizations and collusions reduce efficiency and aggregate income in the societies in which they operate and make political life more divisive.
5. Encompassing organisations have some incentive to make the society in which they operate more prosperous, and an incentive to redistribute income to their members with as little excess burden as possible, and to cease such redistribution unless the amount redistributed is substantial in relation to the social cost of the redistribution.
6. Distributional coalitions make decisions more slowly than the individuals and firms of which they are comprised, tend to have crowded agendas and bargaining tables, and more often fix prices than quantities.
7. Distributional coalitions slow down a society’s capacity to adopt new technologies and to reallocate resources in response to changing conditions, and thereby reduce the rate of economic growth.
8. Distributional coalitions, once big enough to succeed, are exclusive and seek to limit the diversity of incomes and values of their membership.
9. The accumulation of distributional coalitions increases the complexity of regulation, the role of government, and the complexity of understandings and changes the direction of social evolution.

In particular, Olson argues:

In the long run, then, multigenerational special-interest groups must tend toward endogamy. This is equally true of the South African whites, the Indian castes, and the European nobility.

Later in the book, Olson takes what I think is a very interesting piece of political economy theory, and applies it to a set of macroeconomic questions that I found far less interesting. That debate wasn’t interesting then, and I suspect recent academic debate has moved well past the questions about macroeconomic growth that were relevant at publication.

For the most part, though, I found this an excellent read. It touches on a very interesting set of questions – how does a society organise itself? and proferred what I thought were interesting ideas, that the costs of organising have an impact on who can organise, and in turn, on how organised groups can impact the distribution of benefits and costs in society. It also did it in a reasonably specific way, lending itself to testing the hypothesis. If you’re interested in political economy, I’d say the first two thirds of this one are well worth a read.

It’s helpful, as well, that most research since then has seemed to confirm his hypothesis.

Quotes

If the consumer or worker contributes a few days and a few dollars to organize a boycott or a union or to lobby for favorable legislation, he or she will have sacrificed time and money. What will this sacrifice obtain? The individual will at best succeed in advancing the cause to a small (often imperceptible) degree. In any case he will only get a minute share of the gain from his action. The very fact that the objective or interest is common to or shared by the group entails that the gain from any sacrifice an individual makes to serve this common purpose is shared with everyone in the group … The paradox, then, is that (in the absence of special arrangements or circumstances to which we shall turn later) large groups, at least if they are composed of rational individuals, will not act in their group interest.

The limited knowledge of public affairs is in turn necessary to explain the effectiveness of lobbying. If all citizens had obtained and digested all pertinent information, they could not be swayed by advertising or other persuasion. With perfectly informed citizens, elected officials would not be subject to the blandishment of lobbyists, since the constituents would then know if their interests were betrayed and defeat the unfaithful representative at the next election. Just as lobbies provide collective goods to special-interest groups, so their effectiveness is explained by the imperfect knowledge of citizens, and this in turn is due mainly to the fact that information and calculation about collective goods is also a collective good.

… the larger the number of individuals or firms that would benefit from a collective good, the smaller the share of the gains from action in the group interest that will accrue to the individual or firm that undertakes the action. Thus, in the absence of selective incentives, the incentive for group action diminishes as group size increases, so that that large groups are less able to act in their common interest than small ones.

In no major country are large groups without access to selective incentives generally organized – the masses of consumers are not in consumers’ organizations, the millions of taxpayers are not in taxpayers’ organizations, the vast number of those with relatively low incomes are not in organizations for the poor, and the sometimes substantial numbers of unemployed have no organized voice.

… there is for practical purposes no constraint on the social cost … an organization will find it expedient to impose on the society in the course of obtaining a larger share of the social output for itself.

The leadership of whatever party is perceived to be in control usually is to some extent concerned about the aggregate national consequences of the policies chosen, since there is some connection between the state of the nation and the election prospects of the party deemed to be in control.

… the power of special-interest groups cannot be defined solely in terms of their organizational strength but should, strictly speaking, be defined in terms of a ratio of their power to that of more encompassing structures such as presidents or political parties.

When ignorance is often a rational strategy for constituents, there is a substantial possibility that an interest group or a political leader will not act in accord with the interest of constituents.

The poor and the unemployed have no selective incentives to enable them to organize, whereas small groups of great firms or wealthy individuals can organize with relative ease. Thus life is not any gentler because of special-interest groups, but it is less productive, especially in the long run.

The trouble is that the current orthodoxies of both Left and Right assume that almost all the redistribution of income that occurs is the redistribution inspired by egalitarian motives, and that goes from the nonpoor to the poor. In reality many, if not most, of the redistributions are inspired by entirely different motives, and most of them have arbitrary rather than egalitarian impacts on the distribution of income – more than a few redistribute income from lower to higher income people. A very large part of the activities of governments, even in the developed democracies, is of no special help to the poor and many of these activities actually harm them. In the United States there are subsidies to the owners of private airplanes and yachts, most of whom are not poor …

There is greater inequality, I hypothesize, in the opportunity to create distributional coalitions than there is in the inherent productive abilities of people …

If the less optimistic theory in this book is right, there will not be competitive markets even if the government does not intervene. The government is by no means the only source of coercion or social pressure in society. There will be cartelization of many markets even if the government does not help.

Equilibrium theory may have something in common with the attachment of nineteenth-century physicists to the concept of an “ether” that was supposed to fill all space and suffuse itself even into material and living bodies.

Lies, Incorporated

Lies, Incorporated: The World of Post-Truth Politicsby Ari Rabin-Havt and Media Matters is an interesting book. I’ve been reading a few books on media recently (including The Attention Merchants and Rupert Murdoch). I’d hoped that Lies Incorporated would be an insight into the relationship between other forms of power and media.

To some extent it is. It talks about how particular groups can use think-tanks and other organisation to influence public debate, through the media and other channels.

Unfortunately, though, the book isn’t a deep dive into the theory, or framework of how that might work. Instead it steps through individual case studies, one by one. Tragically, these are all so similar that the repetition doesn’t engender deeper understanding.

There are some interesting anecdotes though. This is interesting if you’re researching one of the particular topics, and it has a particular depth on smoking, but otherwise this isn’t one I’d recommend.

… in 1935, during “the last two weeks of June”, a flood of eight hundred thousand “letters and wires heaped up in congressional offices.” This would have been an impressive display of public interest in the issue, except the messages were fake. After receiving hundreds of messages, Pennsylvania congressman Denis Driscoll thought they seemed irregular. He replied to several of his constituents only to be told they had not sent him the telegrams.

These fake constitute contacts led to an investigation headed by then Senator and future Supreme Court justice Hugo Black. It found that Western Union had coordinated with Associated Gas and Electric to send the fake messages. Many of the names were taken “from the early pages of the city directory.” Others were acquired by paying “a messenger boy named Elmer” three cents per signature secured for the project.

 

These letters [from an NAACP Branch, a women’s group and an ageing advocacy group] were forgeries–created by a public affairs firm, Bonner & Associates, which had been subcontracted by the ACCCE. The firm ultimately claimed the fraudulent letters were the work of a rogue employee, who was terminated, and went back to business as usual.  

Media and voter behaviour

A little while ago the thought occurred to me that although I assume, or take it for granted, that media has some impact on people, I didn’t know what the research actually said about how media affected voting. There’s plenty out there about the psychology of advertising – but less came to mind for media and politics.

After a short burst of googling, here are some of the more interesting pieces I found:

  • A blog post digs a little into causality, and concludes that there are two-way relationships between basically everything.

My sense is that what we have here is a feedback loop. Does media attention increase a candidate’s standing in the polls? Yes. Does a candidate’s standing in the polls increase media attention? Also yes

  • A study run in 2005-2006 randomly gave free newspapers to households. While only run in one area of the US, the result showed that giving either a left-leaning or right-leaning paper resulted in a higher Democratic vote. Given the geographic constraints, hard to know how broadly applicable this is.
  • A paper that examined data from 1996 and 2000 (that seemed to be one of the more frequently cited) found that Fox News increased Republican vote share.
  • A 2015 paper (that I haven’t downloaded) concludes that public interest and media coverage both influence each other in the US Republican primary.
  • A 2016 analysis of UKIP concludes that media coverage does drive voter support.
  • John Sides argues that the media drives voter behaviour – it’s inconceivable that it wouldn’t.

It’s just that most of us, most of the time, have to rely on the media for information about the world, information that helps us determine which issues — or candidates — are worth paying attention to.  What else are we going to do?  Most of us don’t have the opportunity to talk to the candidates ourselves. And it’s not like we’re going to conduct our own original research (“Honey, I’ve spent the day reading 12 newspapers and every candidate’s Web page. Here’s what I’ve found.”)

So. Those are the articles I found in a quick search. It’s not a meta-analysis, or a literature review. If you find anything more interesting or more detailed, let me know. It’s an interesting question.

Articles

A few random things:

  • I like 538’s work, and I particularly like this piece on the Comey letterThey clearly set out their logic in arguing their logic that while their are multiple factors that impact any election outcome, the Comey letter was a clear impact, and one that was significant enough to almost certainly tip the scales:

The Comey letter wasn’t necessarily the most important factor in Clinton’s defeat, although it’s probably the one we can be most certain about. To explain the distinction, consider Clinton’s decision to run a highly negative campaign that focused on branding Trump as an unacceptable choice. One can imagine this being a huge, election-losing mistake: Trump’s negatives didn’t need any reinforcing, whereas Clinton should have used her resources to improve her own image. But one could also argue that Clinton’s strategy worked, up to a point: Trump was exceptionally unpopular and needed a lot of things to break his way to win the election despite that. The range of possible impacts from this strategic choice is wide; perhaps it cost Clinton several percentage points, or perhaps it helped her instead. The range from the Comey letter is narrower, by contrast, and easier to measure. It was a discrete event that came late in the campaign and had a direct effect on the polls.

The standard way to dismiss the letter’s impact is to say that Clinton should never have let the race get that close to begin with. But the race wasn’t that close before the Comey letter; Clinton had led by about 6 percentage points and was poised to win with a map like this one, including states such as North Carolina and Arizona (but not Ohio or Iowa).8My guess is that the same pundits who pilloried Clinton’s campaign after the Comey letter would have considered it an impressive showing and spoken highly of her tactics.

Thus, you have to assess the letter’s impact to do an honest accounting of the Clinton campaign. If you’re in the “Big Comey” camp and think Clinton would have won by 5 or 6 percentage points without the letter, it’s hard to fault Clinton all that much. Even given all of Trump’s deficiencies as a candidate, that’s a big margin for an election in which the “fundamentals” pointed toward a fairly close race. “Little Comey” believers have more room to assign blame to Clinton’s campaign, in addition to Comey (and the media’s coverage of him).

Facebook claimed the report was misleading, assuring the public that the company does not “offer tools to target people based on their emotional state”. If the intention of Facebook’s public relations spin is to give the impression that such targeting is not even possible on their platform, I’m here to tell you I believe they’re lying through their teeth …

In a white paper authored by the company’s security team and published on Thursday, the company detailed well-funded and subtle techniques used by nations and other organizations to spread misleading information and falsehoods for geopolitical goals. These efforts go well beyond “fake news”, the company said, and include content seeding, targeted data collection and fake accounts that are used to amplify one particular view, sow distrust in political institutions and spread confusion.